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  • Retirement Savings Crisis Getting Worse, Not Better

    As long-time readers know, one of my continuing themes over the years has been saving, and in particular saving for retirement. Record numbers of Americans are retiring every year and, unfortunately, most have not saved nearly enough for the retirement lifestyle they envisioned.

    Even worse, more and more Americans are retiring with debt – mortgages, car payments, credit cards, etc. It used to be that you planned not to retire until you were out of debt and with a comfortable nest egg. Not so anymore.

    Today we will look at some recent retirement findings from the Transamerica Center for Retirement Studies  which are very concerning. We will also look at a recent survey by the Teachers Insurance and Annuity Association – College Retirement Equity Fund, which researches retirement trends. The results are alarming.

    And finally, we’ll look at the question of how much you need to save to have a comfortable retirement. Unfortunately, this is a complicated subject that depends on several variables such as how much you have saved already, at what age you plan to retire, the lifestyle you wish to have, etc., etc. It’s a very important topic, so let’s get started.

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  • Halbert Wealth Celebrates 20 Years, I Celebrate 40 Years

    This year marks the 20th anniversary of Halbert Wealth Management. 2015 also marks my 40th year in the investment business. Since many of my readers don’t know my career history, I thought I would devote this mid-summer issue of Forecasts & Trends to telling my story going back to 1975 when I first got into the investment business.

    I also want to revisit how and why I came to found Halbert Wealth Management and began searching for professional money managers in 1995, and have continued to do so ever since. If you’re an investor, I think you’ll find this story interesting.

    I’ll finish out today’s E-Letter by highlighting two of my favorite money managers, each with 19 and 20-year performance records. These two should be strong candidates for almost any well-diversified portfolio.

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  • Investors Shun Stocks But Cling To Bonds - Why?

    This week, the Halbert family is taking it easy in sunny Florida, celebrating our son's graduation from college. Instead of my usual writing, I'm going to reprint an excellent article on investor behavior penned by the Wall Street Journal's Jason Zweig.

    As anyone reading my E-Letter knows, I have been concerned for some time about the effect of rising interest rates on bond prices, yet investors continue to pile money into these investments. Even in the face of a powerful bull market in stocks, investors are ignoring equities and clinging to bonds. It just doesn't make sense - at least not until you read the article below.

    Zweig seeks to answer the question of why investors continue to pile into bonds by examining the field of investor behavior. I think you will find his article to be interesting and perhaps a bit revealing. I have also added a few comments of my own throughout the article. Enjoy!

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  • Latest United Nations Push For Global Taxation

    The United Nations recently formalized a broad set of global taxes and penalties that it wants to impose on developed nations in the Northern Hemisphere, and especially the US. The UN wants to raise some $400 billion annually to send to lesser developed nations in the Third World. And the kleptocrats at the UN want to implement these huge new taxes by the end of this year while President Obama is sure to be in office.

    These new taxes include a 1% income tax on all billionaires worldwide, a tax on all financial transactions (stocks, bonds, etc.), a tax on currency transactions, a carbon tax on developed nations, a tax on commercial airline flights from the US to Europe, a tax on oil and gas extracted offshore, a global tobacco tax, etc. Oh, and one more: control of the Internet.

    Since the UN does not have the legal authority to impose these taxes, it will attempt to structure these new taxes as "treaties" with member nations. US treaties are signed by the President and ratified by the Senate. The House of Representatives has no say when it comes to treaties. The question is, would President Obama sign such a treaty? And would the Senate ratify it? I would like to say no.

    You need to read the information I have included (and documented) in today's E-Letter carefully and consider it seriously before the election on November 6. We cannot allow our country to be subjected to UN defacto control vis-a-vis these onerous taxes. Above all, we cannot allow the UN to control the Internet. There is a choice in the upcoming election, and we need to speak loudly!

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  • Our Millionaire Congress & the Top 1%

    Do you think that you could keep your job if your employer ranked your job performance at only 11%? Probably not, but it seems that Congress is doing just that. A recent Gallup poll found that only 11% of Americans approve of the job Congress is doing, and a whopping 86% disapprove.

    Since our legislators supposedly work for us, it looks like they are not making the cut. Adding insult to injury was a report saying that members of Congress actually got richer from 2004 to 2010, while the rest of the nation's wealth stayed flat or actually fell. So, while Congressional job performance got worse, their personal wealth grew.

    One reason that members of Congress experienced asset growth while everyone else languished may be the fact that they can trade on inside information that they get as a member of Congress - and it's perfectly legal. Knowing the status of pending legislation, regulatory actions, committee hearings, etc. means that they have a leg up on the rest of us who are prohibited from trading on inside information. If more Americans knew about this, I suspect the 11% approval rate would drop quickly.

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  • 2012: Another Year of Uncertainty & Volatility

    Due to the holidays, I have chosen to include a couple of articles I found quite interesting for your reading pleasure today. The first article is from yesterday's The Weekly Standard, which analyzes the outlook for 2012 from two different perspectives, based on the various assumptions one can use. I think you will enjoy it.

    The second article below comes from Barry Ritholtz, the author of the popular book “Bailout Nation.” Barry pokes some fun at the many New Year forecasts we all hear this time of year, and he points out that most of them prove to be wrong. I'll be back to my usual chorus of topics and titles starting next week.

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  • Best Critique of Obama I’ve Ever Read

    The holidays sneaked up on me faster than usual this year, what with a couple of extra business projects that required a lot more time than I expected over the last few months. Given a number of year-end deadlines, I have elected to reprint an excellent article today by Peter Ferrara that is perhaps the best critique of President Obama that I have ever read. If you are an Obama fan, you probably don’t want to read this; on the other hand, maybe you should.

    Ferrara succinctly examines Obama’s upbringing, his early professional life, his liberal ideology, his ascendency into politics, his becoming President of the United States and his policies since occupying the White House. This is a very interesting and insightful read, especially in light of the challenging economic and financial times we find ourselves in.

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  • The Quest for Low-Risk Retirement Income

    Over the years, our client surveys have consistently shown that there is a high degree of interest in investments that can be used to provide retirement income. As the Baby Boom generation continues to age, this demand is going to become larger and larger.

    Fortunately, the Wellesley Convertible Bond Program that I highlighted earlier this month can be an excellent vehicle for taking income. Since convertible bonds are a hybrid of stocks and bonds, they have the potential to provide the growth necessary for a stable retirement income investment as well as manage the risk of loss during down markets. If you or someone you know is at or near retirement, this is definitely a program you should consider.

    I also want to wish each and every one of you a Merry Christmas. With both of my kids now in college, Christmas has become extra special as they come home to celebrate during their break from school. It's like old times, even if just for a while.

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  • Why Convertible Bonds Make Sense Now

    This week, we revisit Wellesley Investment Advisors. You may recall that Wellesley has been very successful by investing in convertible bonds, but only certain types of convertible bonds. Wellesley invests primarily in convertible bonds that have "put" options which allow them to exit positions prior to maturity. This gives Wellesley a big advantage as you will read in today's E-Letter. I happen to believe that most sophisticated investors should have an allocation to convertible bonds in their portfolios, and I also believe that Wellesley Investment Advisors is the place to be. With a 16-year track record and average annual returns of almost 10%(net of all fees and expenses), I believe most investors reading this should take a serious look at Wellesley right away. (Past performance is not necessarily indicative of future results.) I feel that the Wellesley Limited Risk Investing program could be an excellent choice during the current uncertain market environment, especially given Wellesley's opinion that convertible bonds may be a hot place to be in 2012. I think you owe it to yourself to at least check out this program to see if it can complement your other allocations. My recommendation to you today is that you take a serious look at Wellesley right away so that you can get your account opened before the end of the year. That way, you will have the benefit of professionally managed convertible bonds in your portfolio to start the New Year. Don't procrastinate, call today 800-348-3601.

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  • Is the Debt "Super Committee" Doomed to Fail?

    The so-called congressional "Super Committee" that was set up during the debt ceiling battle back in August is charged with finding $1.5 trillion in federal spending cuts over 10 years, and the deadline to do so is November 23 - just over a month from now. If the Super Committee fails to come up with $1.5 trillion in cuts, then some nasty triggers come into play to automatically cut spending across-the-board at the beginning of 2013.

    Obviously, the Super Committee has a gargantuan task ahead of it and on a very short fuse (i.e. - Nov. 23) to find $1.5 trillion in spending cuts over the next 10 years. Will the 12 committee members (6 Republicans and 6 Democrats) be able to reach such a historic agreement in time before the mandatory triggers and spending cuts go into place? Frankly, I doubt it.

    The mainstream media has been largely silent in recent weeks on this looming controversy. So, in today's E-Letter I will succinctly get you up to speed on the pertinent issues surrounding the Super Committee and the challenges it faces. This is definitely something you need to know about and understand as the debate in Washington unfolds in the weeks just ahead.

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  • European Debt Crisis Revisited - Implications For the US

    Today we take a fresh look at the European debt crisis which is worsening. Just over a month ago, EU leaders agreed on a second bailout loan for Greece to keep it from defaulting. That bailout loan had to be approved by all EU member nations, and several have refused to do so unless Greece can put up collateral. This has caused the bailout agreement to unravel and Germany's Chancellor Andrea Merkel is frantically trying to put it back together. If she fails, we could get another serious shock to the equity markets in the US.

    Meanwhile, the European Central Bank began buying huge chunks of government bonds from Italy and Spain to keep their credit markets functioning. Some argue that the ECB is not authorized to make such purchases but it is doing so anyway. It remains to be seen just how long the ECB can continue this large-scale quantitative easing. In any event, the European debt crisis is worsening, and I continue to believe that it will have more negative consequences for our markets here.

    A new CNN poll found that Americans' confidence in Congress is at a new low. For the first time ever, a majority of Americans want the bums in Washington voted out of office -- including their own Representatives in Congress. In past polls a majority wanted some members of Congress kicked out, but not their own Representatives. You'll find this story very interesting. Finally, I leave you today with a very good article written by Tony Blankley who offers President Obama some advice for his major speech on Thursday night.

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  • On the Economy & the Fed - Now What?

    We touch on several bases in today’s letter. We begin with Fed Chairman Ben Bernanke’s key speech at the Fed symposium in Jackson Hole, Wyoming last Friday, which proved to be a yawner despite all the anticipation beforehand. Next, we look at last Friday’s disappointing GDP report which was revised lower, alonng with other recent economic reports.

    Following that, we look at the latest long-term budget forecasts from the Congressional Budget Office. As I will discuss below, the CBO uses so many optimistic assumptions in these forecasts that one wonders if they are even relevant anymore. In any case, I’ll give you the latest numbers.

    Next,I make the case that the US economy has now drifted once again into “stagflation” – defined as slow growth and rising inflation. Expect to hear more references to stagflation in the days and weeks just ahead, but you heard it here first. Finally, we look at the latest chaos in the stock markets.

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  • Cut a Check, Mr. Buffett

    Last week, Warren Buffett again came out in favor of higher taxes for the rich like himself. The next day, President Obama echoed Buffett's comments, proving that they were no more than a carefully orchestrated piece of political rhetoric. Even so, Buffett's article is a good starting point for a discussion of why some people pay higher rates of taxes than those who are rich.

    This week, I'm going to dissect Buffett's statements about his own tax rates and those of his staff. I'll also review the various categories of income that qualify for preferential tax treatment and why they are set up that way. In the end, you'll find that special tax treatment is often associated with activities that provide capital for economic growth as well as the requirement to take the risk of losing all of your money.

    I'll end up by showing a way that individuals, including Mr. Buffett, can make voluntary contributions toward reduction of the national debt without the unnecessary step of raising taxes. If Mr. Buffett feels strongly that he should pay more for government, he can just send them a check. Unfortunately, the real issue isn't that taxes on the rich have become too small, but that the government's appetite for tax revenue has grown too big.

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  • Who’s Worse Off - America or Europe?

    We touch on several topics in today's letter, but the main theme is the question of who is worse off financially speaking, the US or Europe. I have written extensively about the growing European debt crisis in recent weeks, which I considered much more important than the debt ceiling circus that played out in Washington in July. It is now obvious to even the man on the street that there is a debt crisis in Europe, of late including even Spain and Italy, with rumors swirling about France as well. A real solution is not yet in sight.

    Yet the US has plenty of debt problems of its own, with a national debt of $14.4 trillion, by far the largest of any nation on the planet and a president who thinks that trillion-dollar annual budget deficits are no big deal. Thus, it is only natural for observers to ask which is in worse shape - Europe or America? I will give you my thoughts on the question as we go along today. In a nutshell, Europe is worse off today, but the US is not far behind and is gaining ground at warp speed, sadly.

    Following that discussion, we will explore whether or not Ben Bernanke and the Fed are cooking up another round of quantitative easing (QE3), and if they are, when we might first hear about it. Think August 26 - I'll tell you why below. Next, I will give you my thoughts on gold, and specifically why I don't think most gold buyers today have any idea how much risk they are taking. I trust that my readers are not jumping into gold at today's nosebleed levels, but I will tell you why that might not be a good idea in any event.

    Lastly, we revisit the issue of Standard & Poor's recent downgrade of US debt from AAA to AA+ when none of the other credit rating agencies felt so inclined. Could there have been some political motivation behind the S&P's unilateral move? Surely not - wink, wink. Did the S&P mean to send a message to Congress about cutting spending? Maybe. Or was the S&P just trying to salvage its tarnished reputation after rating subprime mortgages AAA in the years leading up to the financial crisis? It should be an interesting discussion.

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  • The European Debt Crisis is Spreading

    The debt crisis in Europe is intensifying with Italy and Spain falling into the mix, as I predicted in my July 19 E-Letter. You may recall that the European Union formed a bailout fund in June 2010, but as I will point out today, that fund is nowhere large enough to handle this crisis. Now even the European Central Bank has pledged to buy bonds from Italy and Spain, as well as the other PIIGS, but the ECB is also too small to vacuum up all of the troubled debt in Europe.

    In my July 19 letter, I wrote the following warning: "If this [Greek default] happens, I would expect the US stock markets to plunge again, perhaps as they did in 2008. And this could happen at any time." While I don't have a crystal ball, I had a strong sense that the markets and the investment public were all too focused on the debt ceiling battle and not on the deepening credit crisis in Europe. Unfortunately, my warning was right on the money.

    Equity markets around the world started falling severely last week, and yesterday's action saw the Dow Jones plunge by 635 points in what was one of the worst market days in history. Investors are selling stocks and equity mutual funds with abandon and are herding into Treasury funds and gold. This may prove to be a bad move since interest rates can only go so low, and gold has a long history of falling off a cliff whenever it turns down.

    The US stock markets moved higher this morning. The Federal Reserve met today and did NOT announce a new round of QE3 as was widely expected. As a result the stock markets all reversed sharply lower for a time. But as traders read that the Fed plans to keep short-term interest rates near zero until mid-2013, the markets reversed again to close sharply higher this afternoon. The wild market ride continues!

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